Dow jumped 241 (near session highs), advancers over decliners about 5-1 & NAZ shot up 181 to a new record. The MLP index jumped 5+ to the 178s & the REIT index jumped 4+ to the 466s. Junk bond funds fluctuated & Treasuries were being purchased, bring lower yields. Oil gained 1+ to the 68s as hurricane Ida heads for thew Gulf & gold advanced 25 to 1820 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Americans' confidence in the economy is waning as the highly contagious delta variant drives a COVID-19 surge nationwide. Tha's according to a new survey by Gallup, which found that 60% of respondents think the economy is worsening, compared to just 37% who think it's improving. In Jul, about 54% of Americans said they thought the economic outlook was deteriorating, while 41% believed it was getting better. Gallup's Economic Confidence Index, which summarizes Americans' views of the economy, also fell from -6 to -12, the same level of the gauge in Feb. Although it remains better than the pandemic low of -33, it's a far way from the +41 it sat at in Feb 2020, before the virus triggered the deepest – & shortest – recession in US history. The gauge is measured on a scale of -100 to +100. There was a partisan divide in whether Americans believed the economic outlook was brightening or not: Confidence among Reps & independents dropped in Aug, but not among Dems. The fading confidence appears to be tied to the spike in new COVID-19 cases, which has rattled markets & raised concerns among investors that rising infections could bring about new lockdown measures & a drawn-out economic recovery. The Aug survey found the percentage of Americans naming COVID-19 as the top problem facing the country had nearly doubled, with 26% of respondents identifying it as their biggest concern. Although the US was making solid progress with vaccinations – 73.5% of adults have received at least one shot, according to the Centers for Disease Control & Prevention (CDC) – & infections began falling, cases have rebounded recently as the delta variant spreads among the unvaccinated population. The US is averaging about 152K new daily cases in the last 7 days, compared to the 11K 7-day average in Jun, according to the CDC. The survey of 1006 adults took place Aug 2-17 & the survey has a margin of error of plus or minus 4 percentage points.
Americans losing confidence in economy as delta drives COVID surge
Federal Reserve Chair Jerome Powell's conviction that the inflation winds whipping through the US economy this year soon will subside is not universally shared. In fact, a growing contingent within the Fed's virtual halls is raising concern that the supply chain disruptions, burgeoning demand & shortages of labor & supplies could push the current trend well into 2022 & beyond. Patrick Harker, the pres of the Philadelphia Fed, said as much just before Powell gave his pivotal Jackson Hole symposium speech. The Fed not only has achieved the inflation part of its mandate by keeping the level at well above 2% for a period of time, but it also faces the challenge that those price pressures don't seem to be fading, Harker said. “There’s also some evidence that they may not be so transitory, and that’s a risk I’m worried about,” the central bank official. Business contacts in Harker's region “are seeing clear price pressures,” he added. “What I’m hearing is they’re trying not to pass most of that along to the consumer and customers … That said, they are passing some of that along. That’s inevitable. So far people have been understanding. That won’t last forever. At some point, we need to get this under control.” Those remarks stood in stark contrast to Powell's speech. The Fed chief devoted a long passage in the remarks to rebut the notion that inflation posed a longer-term structural problem to the economy. He attributed most of the current price rise to a surge in longer-lasting “durable” goods that in pre-pandemic times actually had a long-running negative inflation rate. Moreover, he said there is evidence that one key area of inflation, used car prices, has stabilized & is likely to bring the overall rate much closer to the longer trend. Earlier Fri, the Commerce Dept reported that the Fed's preferred inflation gauge, the personal consumption expenditures price index, had expanded by 3.6% from a year ago, the fastest pace in about 30 years.
Powell’s benign view on inflation is getting pushback at the Fed, and elsewhere
Pres Biden said US regulators are looking at administering Covid-19 booster shots 5 months after people finish their primary immunizations, moving up the expected timetable for a 3rd shot by about 3 months. Biden, who was speaking with Israeli Prime Minister Naftali Bennett, said health officials were considering following that country's lead on boosters. “We’re considering the advice you’ve given that we should start earlier,” Biden said, adding that officials are debating whether the timeline should be shorter. “Should it be as little as five months and that’s being discussed.” Approval of the booster shots is expected to come sometime around Labor Day after federal health officials have time to review data from other countries. National Institutes of Health Director Dr Francis Collins last week said data released by Israel on the effectiveness of Covid-19 vaccines over time was prompting US health leaders to rethink their position on vaccine booster shots. Israel released new data on Aug 16 showing a reduction in the effectiveness of Pfizer's (PFE) Covid vaccine against severe illness among people 65 & older who were fully vaccinated in Jan or Feb. Israel released more data Sun showing a booster dose provided 4 times as much protection against infection from the delta variant than the previous 2-dose regimen in people 60 & older. The booster dose also provided 5-6 times more efficacy in preventing hospitalization or serious illness. About 1.5M Israel residents have received a booster dose of a Covid-19 vaccine. Later in the day, White House spokeswoman Jen Psaki clarified Biden's comments, saying that he would rely on officials at the CDC & FDA to make any changes to formal US health guidance, which is currently 8 months. “So I want to be very clear on that, if they were to change their guidance based on data for any particular group, he would of course abide by that,” Psaki added. “But for people watching at home for you all who are reporting out this nothing has changed about the eight month timeline as it relates to the boosters.”
Biden says U.S. health officials are weighing Covid booster shots in 5 months, moving up third shot
Gold futures settled back above the key $1800-an-ounce mark, their highest in nearly 4 weeks. Remarks from Federal Reserve Chair Jerome Powell revealed that he supports tapering the pace of bond purchases this year, but continued to see high inflation as “transitory.” Powell said “at the FOMC’s recent Jul meeting, I was of the view, as were most participants, that if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year.” In the speech, however, Powell didn't discuss when the Fed might formally announce the taper of the pace of bond purchases. Following the remarks, the US stock market & gold prices traded higher. Dec gold rose 1.4% ($24.30) to settle at $1819 an ounce, with the precious metal scoring a weekly gain of 2% based on the most-active contract, the highest since Aug 2. Ahead of Powell's comments, Atlanta Fed Pres Raphael Bostic said he was focused on conditions in the labor market. The voting member of the Federal Open Market Committee's said that the US economy is “very close” to the substantial progress benchmark needed to start tapering its asset purchases but “a lot depends on what happens in the next couple of months.” The remarks also come after statements Thurs from a trio of nonvoting central bank officials, including Kansas City Fed Pres Esther George, Dallas Fed Pres Robert Kaplan & St Louis Fed Pres James Bullard, who all said they would favor tapering sooner than later.
Gold ends at nearly 4-week high as Powell remarks fail to offer any surprises on Fed plans
Oil & natural-gas futures settled higher to tally strong
gains for the week as a storm, now known as Hurricane Ida, threatened
the Gulf Coast. Ida, with maximum sustained winds at 75 miles an hour, was a Category 1 hurricane, according to the National Hurricane Center. It is forecast to make landfall along the US northern Gulf Coast on Sun. Energy companies have been moving crews off platforms in the Gulf of Mexico. The Bureau of Safety & Environmental Enforcement reported
(BSEE) that personnel from a total of 89 production platforms — nearly 16% of
the 560 manned platforms in the Gulf of Mexico—have been evacuated. An
estimated 58.5% of current oil production & about 48.8% of
natural-gas production, in the Gulf has been shut in, the BSEE said. West Texas Intermediate crude for Oct rose $1.32 (2%) to settle at $68.74 a barrel. The US benchmark marked a more than 10% weekly
advance, based on the front-month contract. Oct Brent crude,
the global benchmark, rose $1.63 (2.3%) to $72.70 a barrel, with the front-month contract logging a weekly rise
of over 11%. The most actively traded Brent contract, Nov,
added $1.52 (2.2%) at $71.70 a barrel. Data from the EIA released on Thurs
revealed a smaller-than-expected weekly climb in US natural-gas
inventories, up 29B cubic feet to 2.9T cubic feet —
which is below the year-ago & 5-year average levels.
Traders liked what they heard today from Powell & that brought out buyers in force. The Dow finished the week with a gain of 335 & is up 520 in Aug. Next week has the makings of an exciting week with all the chaos in Afghanistan (among other stories).
Dow Jones Industrials
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